Palatine Private Equity has appointed Ian Darby and Michael Fort to its executive advisory board. Darby brings 25 years of experience from the financial services sector. Fort played a key role in the expansion of clinical trials business Synexus.
In recent years, advisory boards and operating partners have become increasingly visible methods for creating value in portfolio companies. Real Deals spoke with Palatine’s new recruits to gain a better understanding of how its advisory panel works.
What do your new positions entail? How will they play out on a daily or monthly basis?
Darby: It means being available to the team to give a view on potential investment opportunities in, and related to, the financial services sector. But also assessing specific opportunities and meeting management teams if appropriate.
Fort: It involves being available to provide input on potential investment opportunities in the healthcare sector and others where I have relevant experience. I am also working with the team on deal origination, using my experience to identify specific companies and healthcare sub-sectors that could be of interest.
Will you aid Palatine partners in sourcing deals? And initiating talks with management teams?
Darby: While I give my thoughts and views on potential investments, ultimately it is
down to the three partners to decide whether to invest or not; I am there to provide additional sector knowledge and expertise. Origination is also a key part of this role – my day-to-day involvement in the sector inevitably means that potential investment opportunities come to my attention.
Fort: The guys at Palatine will listen to what I have to say, however the decision whether to invest or not is theirs to make. This is important to management teams and vendors to be working with partners who actually make the investment decisions.
I will approach and speak to management teams where there may be an opportunity – initial discussions can be critical in terms of a private equity investor demonstrating their sector knowledge at an early stage in order to gain credibility.
In the same vein, will you assist when exiting portfolio companies?
Darby: I will provide input and thoughts if it is appropriate, although the Palatine team are very experienced in working with management teams and advisers to find the right pool of strategic buyers.
Fort: Understanding the market map of potential buyers is important in achieving optimum value at exit. I may be able to provide additional ideas given my background and experience.
How much involvement have you had with the asset class in the past? What is your general impression of private equity?
Darby: I have had lots of experience, both managing assets with private equity investors and buying and selling to the sector. I led the buyout of John Charcol with Warburg Pincus, for example.
Fort: I have quite a bit of experience in the sector over the last 20 years, having been involved in a number of private equity deals. Generally, the impression of private equity in relation to healthcare is very positive.
Overall it is a space that private equity is keen to invest in. Due to the complex regulatory environment and the high scientific content involved to a larger degree in the sector, it is important that firms have some technical knowledge of the sector before investing.